The fall of the Tory party

Handily left out the 30% social housing part?

Don't get me wrong, that would be great, but you didn't outline a mechanism by which MIRAS increases social housing provision. I don't think there is one. Arguably the causality runs the other way as tax giveaways to homeowners reduce gov't revenue and spending.

If it’s more affordable to own a home and there’s healthy taxes on second ones and investment property than you cut out private rentals. Not that hard right? There’s also a higher tax if you own your home outright.

You can achieve all of that more equitably by building more social housing and taxing BTLs. Primary residence mortgage relief is just a bung to the voting middle classes, and as your figures suggest, it has not led to a higher rate of homeownership in the Netherlands than the UK.

I really don't think that the overheated UK housing market needs any more demand-side stimulus.

I know I’m a cocktail or two into the night (it’s past midnight here) so I’ve clearly not explained it correctly. BTL properties don’t get this tax benefit. Ideally it should be limited to first time buyers only imo.

I wasn't assuming that BTLs would be included.

Bottom line I think that the benefits of these types of tax breaks predominantly accrue to property owners and sellers in the form of higher prices rather than to buyers in the form of cheaper mortgages. That's the reality of a market with a high elasticity of supply.

At the moment you need to earn

When our nursery hiked their fees before the parents kicked off, I worked out what the cost for our friends with 3 kids full time was grossed up.

Iirc you'd need to be earning >£86k to cover the bill.

If you're going to give tax breaks they should be to groups you can recoupe revenue by boosting the economy or from those who reduce costs.

So for starters careers and back to work parents.

Property tax breaks just benefit those who've already got property and should be pretty far down the list. Not saying there is no case ever. But it is really far down the list.

Iirc you'd need to be earning >£86k to cover the bill.

Which is why everyone needs to respond to the Select Committee inquiry into it:

https://pregnantthenscrewed.com/we-need-you-to-respond-to-the-government-inquiry-on-childcare/

Unnecessary luxury. Absolute nonsense.

Iirc you'd need to be earning >£86k to cover the bill.

The numbers are obscene. I reduced them in my post to avoid being cross-posted to golf club 😂

If it’s more affordable to own a home and there’s healthy taxes on second ones and investment property than you cut out private rentals.

It's generally not the mortgage payment that's the sticking point here though. When I bought my place the mortgage was cheaper than renting the equivalent.

Yeah. When I grossed it up I was really shocked.

I know three kids isn't usual. But it's a good eg of how you can loose people from the workforce even if they're higher rate tax payers.

Unnecessary luxury. Absolute nonsense.

It depends doesnt it? My car is an unnecesary luxury. Good public transport in the area, trains serve the longer distance places I visit. I'm not mobility impaired. Half the time a bike ride is faster to get to where I need to be if its within London.

Edit: We do however have about 70 cars parked outside our 70 flat block.

Cheers.

In case you didn't notice this is public, so if you do it all your submitted info will be public.

If you judge someone by the company they keep, 30p Lee is an absolutely smashing chap

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I am seriously thinking about putting a couple of quid on 30p as next tory leader.

. I reduced them in my post to avoid being cross-posted to golf club 😂

Dw bbz I did it anyway.

Just checking, but I presume you mean low price elasticity of supply, here? As in, increases in price do not increase the supply of new builds or result in more second-hand homes on the market.

Always lovely to see the basic supply/demand pricing mechanism break when it comes to the largest purchase ever 🙃

Sorry, you are right, I meant high inelasticity (or low elasticity).

Marginal housing supply = land plus ability to build. House prices are high enough that almost any bit of UK land is already economically viable so the binding constraint is planning / labour / materials.

increases in price do not increase the supply of new builds

They kinda do. Or rather falling prices reduce availability of new builds as big builders like Barratt and Persimmon slow their rate of build if the market slows to control supply. Also smaller developers find it harder to get finance to complete their projects in falling markets.

It's advantageous to build dwellings when the market price of dwellings exceeds the costs of land and construction; as far as I can tell this is always or nearly always the case in UK, some planning restriction related abnormalities excepted.

This doesn't fix affordability or even satisfy overall demand.

Demand is also skewed by a whole load of things including investment (i.e. demand) from parties outside of the local economy in which the supply is realised.

tl/dr: supply and demand is mainly a myth imo.

Edit: @NickCJ said it already.

ta, appreciate it <3

Also smaller developers find it harder to get finance to complete their projects in falling markets.

The houses usually get built one way or another, though? Even if the bank has to intervene and wipe out the original developer's equity.

It's rare to see in the UK the situation they had in Ireland post 2008 where property prices fell so far that they were below construction cost (implying a negative land value).